6/10/2010 @ 6:00PM

The Next FarmVille

North Americans have taken a shine to buying virtual cows and cabbage in online games, but they may soon be snapping up virtual bok choy and kimchi instead.

In the U.S., titles like Blizzard Entertainment’s “World of Warcraft” and Zynga’s “FarmVille” are known for making heaps of money from online gaming. But online games that have thrived for many years in China and South Korea have now started to take off on U.S. shores as well.

The biggest online games you’ve never heard of are titles like “Fantasy Westward Journey” and “Perfect World,” from Chinese publishers NetEase and Perfect World, respectively, as well as “MapleStory” from South Korea’s Nexon Corp.

In China, playing PC games at Internet cafes is the standard for most gamers, so Chinese game companies have focused on the online experience. “With the exception of ‘World of Warcraft,’ the focus in the U.S. has not been on online PC games as much,” says Lisa Cosmas Hanson, managing partner of Niko Partners, a research firm that follows China’s videogame market. “In China, the game companies have been able to focus on online games for quite a long time, and they’ve developed an expertise at it.”

While the Chinese game “Perfect World” is somewhat like “World of Warcraft,” with its rendering of fantasy-themed environments and game play, it’s much more similar to “FarmVille” in terms of how it generates revenues: through sales of virtual goods. Chinese players collectively buy a lot of virtual products: around $5 billion was spent on such goods in 2009, according to various analysts’ estimates. By contrast, virtual goods sales hit just $1 billion in the U.S. during that same period, according to a report by Inside Virtual Goods.

In recent years Chinese game companies have brought their experience with these “free-to-play” online games to the U.S., and have started to see some success. In September 2008 the North American subsidiary of Perfect World, based in Redwood City, Calif., launched its flagship game “Perfect World International” for Western audiences. After just a year and a half, the subsidiary says it expects around $50 million in revenues this year, and its main title has 1.5 million registered users. The company plans to put out two new online games in North America within the coming year.

Nexon of South Korea also has a North American subsidiary, Nexon America, which scored $47 million in revenues in 2009, mostly through an international version of its hit online game “MapleStory,” a fantasy title for kids.

The biggest Asian online games still have yet to beat the granddaddy of them all, “World of Warcraft,” which notched up $1 billion in annual revenue last year, and is even popular in China and South Korea. Not every game can be “World of Warcraft,” which runs on a subscription-based model, charging users monthly fees. Though Asian free-to-play games may have lower annual revenue, that model is increasingly attractive to North American online game companies looking to quickly hook players who are not necessarily willing to pay up front.

“This model has been incredibly successful in Asia, and there are signs that it will be successful in the U.S. too,” says David Cole, an analyst at videogame research firm DFC Intelligence.

Asian online games still lag the global momentum of social games, where “FarmVille” reigns. But that could change. China’s version of the farm game, “Happy Farm,” has exploded there, with 23 million daily active users, about the same as Zynga’s hit title. “Happy Farm” was created by Shanghai-based developer 5 Minutes. It recently launched in the U.S. with 300,000 daily active users, but it has attracted enough attention to raise a cool $3.5 million from Silicon Valley venture capital firm Draper Fisher Jurvetson last December.

The hottest game companies in Asia will continue their westward expansion, fueled by the desire for global success. Says Perfect World co-founder Yoon Im: “It’s great if you’re No. 1 in China, but if you’re the top performer in America, then you’re No. 1 in the world.”